Norco Maintains Record High Farm Gate Milk Price Amid Market Pressure
Source: The DairyNews
NSW dairy co-operative Norco has defied industry trends by announcing it will maintain its record high farm gate milk price for the upcoming season. Norco CEO Michael Hampson confirmed the co-operative will offer an average milk price of 89.5¢/litre for farmers in northern NSW and Queensland.
"Despite widespread speculation about potential reductions in milk prices and market pressures, Norco is proud to uphold its record high price, thanks to the continued support of our loyal customers," Hampson stated. He emphasized the co-operative's commitment to supporting its 281 farmer members in a challenging economic environment.
Norco's decision contrasts sharply with other industry players. Saputo and Fonterra have announced opening minimum prices up to $1/kg MS lower than last year, prompting concerns about the sustainability of dairy farming in the region. Phil Ryan, Chair of the NSW Farmers Dairy Committee, highlighted the severe pressures on dairy producers from high input costs, labor shortages, and other economic factors, warning that reduced milk prices could drive farmers out of the industry and have significant economic repercussions.
"These price cuts could cost the industry over $600 million in the next financial year, impacting regional economies and leading to job losses," Ryan said. He noted that some farmers might be protected by long-term contracts, but concerns remain about the broader impact as these contracts expire.
Victorian dairy leaders echoed these concerns, pointing to the lack of incentive for increased production. ACM, based in Girgarre, Victoria, forecasted a price range of $7.80 to $8.20/kg MS, citing market volatility and increased local milk supply as significant factors.
ACM Executive Chairman Michael Auld remarked on the disconnect between global commodity values and domestic farm gate prices, impacting the competitiveness of Australian dairy ingredients. However, Auld expressed optimism that improving demand signals could positively influence farm gate prices in the future.
As Norco continues to support its farmers with competitive prices, it aims to maintain market growth and further review options for increasing milk prices throughout the year. The co-operative's commitment reflects a broader strategy to sustain high-quality local dairy production amid fluctuating market conditions.
Norco's decision contrasts sharply with other industry players. Saputo and Fonterra have announced opening minimum prices up to $1/kg MS lower than last year, prompting concerns about the sustainability of dairy farming in the region. Phil Ryan, Chair of the NSW Farmers Dairy Committee, highlighted the severe pressures on dairy producers from high input costs, labor shortages, and other economic factors, warning that reduced milk prices could drive farmers out of the industry and have significant economic repercussions.
"These price cuts could cost the industry over $600 million in the next financial year, impacting regional economies and leading to job losses," Ryan said. He noted that some farmers might be protected by long-term contracts, but concerns remain about the broader impact as these contracts expire.
Victorian dairy leaders echoed these concerns, pointing to the lack of incentive for increased production. ACM, based in Girgarre, Victoria, forecasted a price range of $7.80 to $8.20/kg MS, citing market volatility and increased local milk supply as significant factors.
ACM Executive Chairman Michael Auld remarked on the disconnect between global commodity values and domestic farm gate prices, impacting the competitiveness of Australian dairy ingredients. However, Auld expressed optimism that improving demand signals could positively influence farm gate prices in the future.
As Norco continues to support its farmers with competitive prices, it aims to maintain market growth and further review options for increasing milk prices throughout the year. The co-operative's commitment reflects a broader strategy to sustain high-quality local dairy production amid fluctuating market conditions.
